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Here are the remarks I made to the NM Public Health Association last week on where we are with health issues as we head into the 2012 session.

December 7, 2011

Thank you to public health advocates and DOH employees—really everyone who works in the health care sector-- who have had to really hang tight during the past few years. On the state level it’s been a year of living with diminished resources for some of the most promising programs in prevention and community health – things that can really make a difference in peoples lives and save money. And during the past year, for me, and the members of the HHS, it’s been a year of uncertainty and adjustment to a new administration that is trying to find its way forward on two important issues: Medicaid and the implementation of national health reform.

Last year’s legislative session—even though it was more divided than usual—came forward with two important bills that implemented the Patient Protection and Affordable Care Act—and many of you were there, advocating for them. One was the establishment of a Health Care Exchange that grew out of recommendations from a broad based task force that met for 8 months last year, chaired by Debbie Armstrong. It created a quasi- governmental, non-profit exchange whose board members were selected by both the legislature and the governor, drawing on both the Health Insurance Alliance and the New Mexico Medical Insurance Pool. It included strong conflict of interest provisions and set up a fairly robust exchange. It was vetoed by Governor Martinez, who said in her veto message that while she favored an exchange, there was too much uncertainty over regulations and costs.

On the other hand, another major bill to require more transparency and give the Division of Insurance more tools and some teeth to review premium increase requests passed, and was signed by the Governor. It was a real victory for consumers, and even though it is not slated to go into effect until Jan. 1, 2012, an ombudsman is on board, the web site is improved and we’ve already seen the Insurance Superintendent reduce two rate hikes, one from Blue Cross and the other from Presbyterian. I can’t help but think that our bill might have had something to do with that! But stay tuned and make sure that public hearings are held and disclosures about reserves, and profits are made according to this state law.

In terms of Medicaid, I believe that the legislature and the Governor acted together to prevent what could have been substantial Medicaid cuts during the last session. Now I say that with a grain of salt because over the past several years, the Medicaid program has actually sustained great reductions in provider reimbursements, in payments to the HMOs, in benefits and in outreach to eligible children in particular. That has offset-- to a degree-- the cost of almost a hundred thousand new recipients that have come on to the program in the past five years, many of them victims of the recession.

But the question of Medicaid continues to be at ground zero of health care debate in New Mexico and it is part of the uncertainty and anxiety that has characterized this past interim. As you know, this past summer the administration-- citing system that is “out of control,” with escalating costs, and a ticking time bomb scheduled to go off in 2014 when over a hundred thousand more people will be eligible for the program-- began to plan a giant redesign. The modernization effort and a waiver from the federal government will be unveiled in the coming weeks—too late for legislative input, and amidst general distrust, spread not so much by the proposal itself, but by the style in which it was completed. We’re still short on specifics, but members of the Health and Human Services Committee, a committee which is specifically charged with overseeing this program, have concluded that the department plans to increase co-pays and shift other costs to recipients in a move to what it calls “personal responsibility. It plans to combine waiver programs including those for behavioral health and long term care under fewer insurance contracts, in effect carving back in what we carved out just a few years ago. In addition, the department will move toward pay-for-performance, encourage accountable care organizations, medical homes and other rearrangements of the delivery system we’ve been talking about forever.

Can the administration do these major reforms with out the consent of the legislature? I think the answer is yes. We have given away a lot of our authority when it comes to Medicaid, this administration, or any administration is not about to give it back voluntarily. Last session Rep. Rhonda King had a bill which would have simply required the Human Services Department to submit a fiscal impact statement and description of proposed Medicaid changes to the Legislative Finance Committee (LFC) and the Department of Finance and Administration (DFA) when it was planning to submit a waiver or amend one. It was pocket vetoed by the Governor. We shall try again this session to reassert some control, but I am not optimistic.

Getting back to health care reform and the state’s implementation of this landmark federal legislation. It’s been a real mixed bag… on the national level partisan acrimony is reaching new heights. But here in New Mexico the money and the benefits from the bill—now estimated over $100 million—keep on flowing into the state. The latest news is Dr. Derksen’s successful application for $34 million in funds to establish an exchange, most of it, as I understand, to be used for information technology.

These dollars are facts on the ground and they are marching forward even as some legislators and administrators throw up their hands and say

“ Wait, Wait, don’t tell me”… we can’t proceed until we have the Supreme Court decision, until we have the essential benefit package, until we have the final exchange regulations, or until we have elections for a new President in 2014.

There are some who would say do nothing, pass no more state legislation, hang loose and let the executive handle everything. I am not one of those, and neither are the members of the Health and Human Services Committee who last week voted to press on with an alternative to the executive’s exchange, a basic health plan, legislative approval of waiver applications, and implementation of Money Follows the Person, among other things.

Still, many of us are uncertain, even chewing our fingernails to see whether we are going to go forwards or back. And as we chew our fingernails, the clock is ticking. There are deadlines to meet. And if we fall short, there are consequences. In the short run most of them involve the state paying more, and the feds having a greater and greater role in an exchange. In the long run, the cost of failure will be profound—in spiraling costs, growing disparities, declining access and quality.

That’s why I’m hoping you will continue to stay involved in these decisions, coming up to legislative hearings, contacting the Governor and her staff. My door is always open to you—please contact Barak Wolff and Cliff Rees, analysts for the Senate Public Affairs Committee who will be on duty come Jan. 17th. Thank you. ###